Q: What if our loans are portfolio only and not sold to Fannie/Freddie or any other government-sponsored enterprise. Can we offer HAMP or Home Affordable Foreclosure Alternatives (HAFA)?
A: Many servicers that are not enrolled in Making Home Affordable (MHA) for their non-GSE loans have created modification and short-sale programs very similar to HAMP and HAFA. These servicers are not eligible to receive Treasury-funded incentives but can offer modifications that follow the HAMP waterfall to reduce a borrower’s payment to 31 percent of the borrower’s debt-to-income ratio and provide the borrower with the same types of protections that HAMP borrowers have. For short sales, servicers that are not able to offer HAFA can still pre-approve a borrower to sell his or her home and can agree in advance to accept certain net proceeds, agree to waive all deficiencies, and pay borrowers a relocation incentive.